Hopes on the job front but offshore experience is like gold dust

EUROPE: The news is full of stories of turbine manufacturers cutting back, of difficulties securing finance and markets plagued by uncertainties as governments across Europe tighten their belts. But the picture is not all doom and gloom.

(photo: Nordex)

Encouragement comes on one level because these markets are underpinned by binding targets under the EU renewable energy directive, with heavy fines attached to non-compliance. On another it is because the cost of fossil fuels will continue to rise in the long-term, and the shine is coming off nuclear power.

While the present problems are undeniably painful, many regard them as temporary. The European Wind Energy Association (EWEA), for example, sees the next two years as being tough for the wind sector but believes things will improve from 2014. In its Green Growth report, published in April 2012, EWEA estimates the sector will employ 520,000 people directly and indirectly in 2020, compared with around 240,000 in 2010.

Offshore leads the way

The figures are even more impressive in the offshore sector. EWEA estimates offshore wind employed 35,000 in 2010 and this will rise to around 170,000 in 2020. Not that it is a done deal, of course. There are questions over support initiatives in a number of countries, including the UK and Germany, while ongoing problems over grid connections are also delaying German projects. But at the same time, the UK is on something of a roll as far as job creation is concerned, with several projects under construction for the second round of UK offshore wind development, and more in development for round three. According to trade body RenewableUK's recent figures, projects with a combined capacity of 1.36GW were approved in the 12 months leading up to July 2012.

This means that some skills are - or will be - in short supply. "Every surveying company is screaming out for qualified and experienced people," says James Betteley, wind energy recruitment consultant at Viridium Associates. Some companies are even having to turn down work because of a shortage of staff, he adds. Part of the problem is that graduates come out of university with no industry experience. But things are changing. The University of Plymouth in the UK, for example, has restructured its courses to provide practical experience so that students can get straight on board.

Competition for staff

Cabling is another area with more jobs than candidates, but here it is a question of money. Most cabling managers and engineers come from the oil and gas industry, where salaries are typically double the amount many renewables companies are prepared to pay, Betteley explains. The cost of cabling a wind installation is about 30% of the total cost of construction, but the financial risk is as high as 70%, he argues. Unless companies increase their budgets, they will not be hiring people with the relevant experience - "people who have already made mistakes and learned", as Betteley puts it. It could be a costly error.

Trevor Parsons, managing director of En-Spiral recruitment agency, sees the main skills shortage in anything requiring deep-water experience. This covers most of the UK's Round 3 projects and a number in Germany, too. "Foundations and technical people are like gold dust," he states, predicting that there will be a real challenge in the UK market to find developers and engineers with deep-water experience over the next 18 months to three years. Difficulties are exacerbated at these Round 3 sites because they are further offshore, in deeper waters and face even more limited fair-weather working periods compared to earlier projects, Parsons explains.

Here again, wind is competing with oil and gas to attract experienced personnel. Parsons agrees that the wind sector finds it hard to tempt people away from oil and gas. "Traditionally they see wind as less exciting technically, less challenging and less well paid," he says.

New French sector

The offshore jobs market is about to take off in France, too, where a series of tenders are structured to promote local industrialisation. Turbine manufacturers Alstom and Areva are building factories in France to supply projects already awarded, with the hope of further orders in subsequent rounds backed up by export opportunities.

Alstom expects to recruit 500 staff for its four factories manufacturing nacelles, generators, blades and towers for its 6MW Haliade turbine, and 200 at an engineering centre. This should also create around 4,000 indirect jobs, Alstom estimates. At the same time, the consortium it is supplying, headed by EDF Energies Nouvelles, anticipates creating 2,000 direct jobs in the construction phase and more than 100 at its operations and maintenance (O&M) centres. This is on the back of three projects totalling 1.43GW awarded to the consortium in the first tender call.

Not all of these will be permanent jobs, of course. Philippe Jan, director of business development at the Nantes Saint-Nazaire Chamber of Commerce and Industry, says he works on the principle of 500 to 1,000 temporary jobs per 100 turbines during installation and just one permanent job per turbine for O&M.

There are mixed messages coming out of Germany. While the country is in theory committed to phasing out nuclear power by 2022, the government is considering putting a cap on the guaranteed feed-in tariff and introducing competitive tenders or quotas. In the meantime, the authorities have already approved 27 offshore installations comprising nearly 2,000 turbines and another 6,600 turbines are in the permitting process. Three projects are currently under construction and by the end of the year another 2GW will be shovel-ready, according to the German wind energy association, BWE. The big stumbling block, however, is resolving questions over the permitting and financing of offshore grid connections.

Shifting onshore markets

Even though onshore wind energy has been having a tough time of late, jobs are being created in certain areas. Bucking the trend of factory closures, German turbine maker Enercon recently opened a tower manufacturing plant employing 60 people in northern France and expects to recruit another 40 staff as market conditions pick up.

Also a number of turbine manufacturers are growing their O&M services, where stable margins and recurring revenues help dampen volatility in turbine sales. Earlier this year, for example, Vestas signed its largest-ever service and maintenance contract, a seven-year deal with Portuguese renewable firm EDP Renovaveis covering 1,100 turbines in the US, Spain, France, Romania, Italy and Portugal. "Maintenance is food for turbine manufacturers," says Parsons of En Spiral. "It's always there, regular and long term."

Some companies are increasing their presence in the emerging markets of Eastern Europe, although manufacturers are likely to face stiff competition from Chinese firms. Hungary, Poland and Romania in particular hold promise, while Turkey is expected to build over 4GW by 2016. Germany, Scotland and Norway are all exploring the possibilities of opening up forested areas for wind-power deployment.

All of this development requires the wires to be in place to transmit the power, whether generated on land or offshore. Expanding and upgrading the grid is something that transcends the wind sector, of course. But it is another area where Parsons sees a looming skills shortage, at least in the UK. "There has been a massive underinvestment over the last 20-30 years," he says, "and now we need to catch up."

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